FAQS on Wellness Programs
Posted on: March 12, 2015Categories: HR & ComplianceOn Jan. 9, 2014, the Departments issued the following FAQs to address several issues related to wellness programs that have been raised since the final rules were published.
Q: A group health plan charges participants a tobacco premium surcharge but also provides an opportunity to avoid the surcharge if, at the time of enrollment or annual re-enrollment, the participant agrees to participate in (and subsequently completes within the plan year) a tobacco cessation educational program. A participant who is a tobacco user initially declines the opportunity to participate in the tobacco cessation program, but joins in the middle of the plan year. Is the plan required to provide the opportunity to avoid the surcharge or provide another reward to the individual for that plan year?
No. If a participant is provided a reasonable opportunity to enroll in the tobacco cessation program at the beginning of the plan year and qualify for the reward (that is, avoiding the tobacco premium surcharge) under the program, the plan is not required (but is permitted) to provide another opportunity to avoid the tobacco premium surcharge until renewal or reenrollment for coverage for the next plan year. Nothing, however, prevents a plan or issuer from allowing rewards (including pro-rated rewards) for mid-year enrollment in a wellness program for that plan year.
Q: A plan participant’s doctor advises that an outcome-based wellness program’s standard for obtaining a reward is medically inappropriate for the plan participant. The doctor suggests a weight reduction program (an activity-only program) instead. Does the plan have a say in which one?
Yes. The plan must provide a reward for individuals who qualify by satisfying a reasonable alternative standard. If an individual’s personal physician states that the outcome-based wellness program is not medically appropriate for that individual and recommends a weight reduction program (an activity-only program) instead, the plan must provide a reasonable alternative standard that accommodates the recommendations of the individual’s personal physician with regard to medical appropriateness. Many different weight reduction programs may be reasonable for this purpose, and a participant should discuss different options with the plan.
Q: The final regulations provide sample language that may be used to satisfy the requirement to provide notice of the availability of a reasonable alternative standard. Are plans and issuers permitted to modify this language?
Yes. The final regulations state that the sample language, or substantially similar language, can be used to satisfy the notice requirement. Plans and issuers may modify the sample language to reflect the details of their wellness programs, provided that the notice includes all of the required content described in the final regulations. Additional sample language is available in examples illustrating the final regulations’ requirements for outcome-based wellness programs. See examples 1, 4 and 6 in paragraph (f)(4)(vi) of the final regulations.
APPLICATION TO GRANDFATHERED PLANS
The ACA’s nondiscrimination provisions for health-contingent wellness programs do not apply to grandfathered plans. However, these plans are required to comply with the 2006 HIPAA regulations, which essentially include the same requirements for wellness programs, but have a lower maximum reward.
However, the Departments believe that the ACA’s rules are authorized under both HIPAA and the ACA. Thus, they apply the same set of standards to both grandfathered and non-grandfathered plans. As a result, the same wellness program standards apply to grandfathered health plans and non-grandfathered plans.
According to the Departments, this approach is intended to avoid inconsistency across group health coverage and to provide grandfathered plans the same flexibility to promote health and prevent disease as non-grandfathered plans.
APPLICATION TO THE INDIVIDUAL HEALTH INSURANCE MARKET
The final rules do not extend the wellness provisions to the individual health insurance market because the wellness exception to the nondiscrimination provisions does not apply to the individual health insurance market. According to HHS, participatory wellness programs in the individual market do not violate the nondiscrimination provisions, provided that these programs are consistent with state law and available to all similarly situated individuals enrolled in the individual health insurance coverage. This is because participatory wellness programs do not base rewards on achieving a standard related to a health factor, and thus do not discriminate based upon health status.
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